The Acceleration of Digital Maturity during the COVID-19 Pandemic in the Retail Industry in Sri Lanka

Abstract

The recent saying is that COVID-19 pandemic had the most exerted influence in the world after the Second World War. Developing countries, such as Sri Lanka, are no exception. The pandemic brought various digital initiatives to cope with limitations that lead to a much-accelerated digital transformation. The retail sector continued to undergo digital transformation in Sri Lanka with a particular focus on advancing the customer experience by digitally creating, delivering, and capturing value. We interviewed top management in various areas in the retail industry in Sri Lanka and followed a hybrid research methodology for analysis combining the grounded theory and the framework-based approach. We described the gap between the focus of the literature’s digital maturity models in the past 10 years and the top management’s needs throughout the accelerated digital transformation during the pandemic as follows: the difference in the percentage of the expression of common dimensions in digital transformation and maturity models and the percentage of the expression of dimensions in the managers’ interviews. Our findings call for the attention of academic research to dedicate more attention to further integrate more dimensions related to technology, cloud and data, digital marketing, and products into the digital transformation and maturity models.

1. Introduction

The origination of the Internet reinforced process automation by linking businesses with customers via web platforms, social media, and mobile apps. This digital transformation influenced all business functions and disrupted the ecosystem in every industry. Nowadays, technology is associated with almost every activity of individuals, from buying groceries to finding a life partner [1]. Digital-native companies are considered grown-ups in a digitally empowered world among companies. Their perspective has been shaped by new technologies, strategies, and approaches to impact the organizational value chain. Not all organizations are comfortable enough in transforming their businesses to comply with the new competitive environment. It requires understanding digital maturity and learning how to respond to the competitive environment rather than converting processes overnight [2].

Bumann and Peter [3] attempted to distinguish digital transformation from the often interchangeably two concepts that have distinct meanings: “Digitization” and “Digitalization.” Digitization and digitalization are often defined based on personalized or organizational perspectives [4]. Extant literature has divided digital transformation into three phases starting from “digitization,” which is defined as “the conversion from analog to digital” [5]. The second phase is “digitalization,” which is defined as “the innovation of business models and processes that exploit digital opportunities” [4] and finally digital transformation. Vial [6] observed three paradigms of digital transformation definitions. First, digital transformation as organization-centric. Second, digital transformation is based on the technologies used and the nature of the transformation crop up. Third, clustering the similarities, such as the use of standard terms. Kane et al. [7] argue that digital transformation is not about using technologies individually but integrating them to transform businesses. A definition of digital transformation that combines all three paradigms is introduced by Vial [6] as “A process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies.” This definition is also supported by Maltaverne [5], who defined digital transformation as “New ways of doing things that generate new sources of value.”

Not all organizations are comfortable enough in transforming their businesses to comply with the new competitive environment. It requires understanding digital maturity and learning how to respond to the competitive environment rather than converting processes overnight [2], which implies the definition of digital maturity as “a measure of an organization’s ability to create value through digital.” Kane [2] emphasizes that focusing on digital maturity instead of digital transformation is more beneficial for the organization. Since becoming mature is a gradual process, it is not easy to see how it looks at the end; hence, it is a never-ending loop. Preparing for a digital future requires the development of digital capabilities within a firm’s activities, culture, people, structure, and sync with organizational goals. In the journey of achieving digital maturity, Kane et al. [8] mentioned that 90% of the digitally matured organizations have overcome the constraints associated with the process by optimizing digital strategy within the business strategy. Further, Kane et al. [8] mentioned that leaders from highly digitally matured organizations could anticipate digital trends and prepare for industry disruptions with the upper hand.

According to the academic literature, digital maturity models are nourished by the Capability Maturity Models (CMM) and its derivatives, such as Capability Maturity Models Integration (CMMI) [9]. In the spectrum of capability maturity levels, “initial” and “optimized” positions are considered as least and highest maturity levels, respectively. Middle levels have been named as “repeated, defined, and controlled” in the ascending order [10]. The dictionary definition of “maturity” falls into two aspects: “reaching the state of completeness” and “raise it to full growth.” However, within the literature, it is termed as “process maturity,” “organizational maturity,” “process capability,” “project maturity,” and “maturity of product capabilities” [9]. The process maturity is a stalk concept of total quality management, which demonstrates improvement in technical and business processes [9] and plays a vital role in digital transformation due to mapping the existing process in the transformation process [11]. Paulk et al. [12] have considered capability maturity in organizational software development and maintenance due to the importance of software development in the digital space.

Digital maturity models provide assistance to identify gaps, manifest vital areas to focus on, and help figure out the starting point of each phase of the digital transformation journey. Hence, digital maturity models act as a guide or a tool to refer to digital transformation to make it less complex [13]. Bumann and Peter [3] examined different dimensions that are studied in the most common models of digital maturity in the literature. Table 1 illustrates the expression of the 20 main dimensions expressed in the most common digital maturity models in the literature.

Source	Strategy	Leadership	Investment	Organization	Culture	Technology	Customers	Process digitalization	Cloud and data	Monitoring	Digital marketing	Products	Operation	People	Governance	Digital environment	Value chain	Innovation	Tasks	Structure
[14]		x	x
[7]	x	x			x	x
[15, 16]	x	x			x	x						x	x	x	x
[8]	x				x									x					x	x
[17]	x	x			x	x	x					x	x	x	x
[18]	x			x	x								x				x	x
[19]	x			x	x	x	x			x				x
[20]		x			x	x	x	x	x	x	x
[21]					x	x									x	x
[13]	x			x	x	x	x						x
Total Score	7	5	1	3	9	7	4	1	1	2	1	2	4	4	3	1	1	1	1	1

Table 1.

Comparative analysis of digital transformation maturity frameworks and action fields/dimensions.

(Source: Ref. [3] with Adjustments)

The analysis of Bumann and Peter [3] provides an in-depth insight into the most applied dimensions in digital transformation and maturity frameworks available within the referred literature in the past 10 years. Models presented by Anderson and Ellerby [13], Schumacher et al. [17], Peyman et al. [15], and Schäfer et al. [16] have paid attention to all highly applied dimensions. Kane et al. [8], Valdez-De-Leon [18], Peter [20], and Schlaepfer et al. [21] reported specific dimensions that others have not caught, namely, investment, process digitalization, cloud and data, digital marketing, digital environment, value chain—ecosystem, innovation, and structure. At the score level, culture (score: 9), strategy/technology (score: 7), leadership (score: 5), customer/operation/people (score: 4), organization/governance (score: 3), and monitoring and control/products (score: 2) are the most vital dimensions, and the rest, such as investment, process digitalization, cloud and data, digital marketing, digital environment, value chain, innovation, tasks, and structure, look like the supporting action fields for digital maturity models.

COVID-19 has recently accelerated the implementation of digital transformation worldwide and across different industries [22]. It accelerated the planned digitalization and digitization processes for enterprises already undergoing transformation. It has also created the neediness for such acceleration in companies that are not digitally mature yet. In this exploratory study, we considered the effect of COVID-19 on the acceleration of digital maturity in the retail sector in Sri Lanka. The Sri Lankan government declared a lockdown from March 20, 2020 to nearly 52 days across Sri Lanka [23]. First, a state of emergency was imposed, and under the state of emergency, a curfew was declared. During the curfew, people were confined to their homes, except for essential service workers (firefighters, police force, doctors, etc.) and those granted special permission such as in supermarkets and pharmacies [24]. Supermarkets and pharmacies started online ordering systems and delivery services; such activities were also closely monitored by the Sri Lankan army. By the third week of May, the curfew was lifted [23]. At the beginning of the lockdown, companies in the country were completely closed but slowly started to operate remotely, and many were reluctant to adopt the work-from-home concept. As we will see in the results section, many companies were unprepared to meet the new normal’s requirements. In the early few weeks of the lockdown, there were also huge inefficiencies in distributing essential groceries and supplies by the government [25].

Due to the exogenous and endogenous tensions arising during the COVID-19 pandemic, to keep business up and running, an agile execution of digital transformation was crucial to achieve a quick response to bounce back [26]. Such a rapid response happened in the absence of a well-formed and approved digital business strategy and a lack of secured sufficient resources. Researchers debated the importance of the fusion of digital business strategy and digital transformation strategy [27]. During the COVID-19 pandemic, Sri Lankan companies accelerated their digital transformation activities and witnessed gradual success attributed with many ups and downs.

This chapter aims at understanding the priorities of digital transformation during the COVID-19 pandemic that was carried out by retail companies in Sri Lanka. It also explores the level of digital maturity achieved due to the disruptive force of the pandemic. By conducting and analyzing in-depth interviews with managers of vital retail companies in Sri Lanka, we attempt to perform a comparative analysis of our findings and the dimensions expressed in the most popular digital transformation and maturity models described in the literature. The main objective is to identify possible gaps between the focus of academic research and the current priorities of retail managers after the COVID-19 pandemic in a developing country like Sri Lanka.

2. Methodology and data

2.1 Method

In line with the scope of our research question, we followed a hybrid research methodology combining the grounded theory [28] and the framework-based approach in qualitative research [29]. We opted for the grounded theory approach due to its popularity in qualitative research as a systematic approach yet flexible, and because it acts as a heuristic device instead of a formal rule or guideline [30]. Being theoretically sensitive, the researchers separated relevant information from the data collected and unlocked meaning in the data based on in-depth reading, personal experience, and understanding of the context [31]. The framework-based approach was utilized due to its use in evaluation studies with a wide variety of data collection methods, such as interviews, observation, and focus groups; hence, it is not limited to philosophical or theoretical approaches.

The data analysis started with broad observations gleaned from the interviews. We used in-depth interviews (IDI) to understand the management response amid the COVID-19 pandemic with respect to digital transformation and digital maturity. The researchers prepared a list of preliminary questions, at the first stage of data collection, the researcher interviewed only three firms as a preliminary step of the research, and the preliminary analysis is described in Ref. [32]. In rhythm with the flow of the interview, the researcher asked unplanned questions. Some of the additional questions were repeated in multiple interviews and thus added to the list of structured questions. The researcher first listened to the interviews before transcribing the corpus into an MS Word document. Then, the researchers went over the transcribed text again and performed a line-by-line coding identifying key terms and phrases using MS Excel. With this, the researchers removed the dross and divided the corpus into smaller segments of paragraphs.

The encoding was performed manually after many rounds of memoing to produce the main themes or categories extracted from the (IDI). The temporal context was distinguished as before or after COVID-19 pandemic. The process we followed comprised the following steps: (i) Line-by-line coding: assign codes to each line in the interview transcript to extract as many insights as possible. It allows for generating new themes that are not available in previous studies. (ii) In vivo codes: These are the symbolic markers of the informant’s articulation, reflecting their perception of the topic by highlighting the main keywords and generating multiple in vivo codes. (iii) Focused coding: This is a more selective and directive phase where the coding process synthesizes a large portion of data. It selects the most frequent codes in the in vivo coding and forms salient categories. In this process, only the in vivo codes that have a more analytical sense are considered. (iv) Temporal context: distinguishes the statement based on whether it belongs to the state before or after the pandemic. Not all segments contain temporal context, some were left blank. (v) Categories: are budding while engaging in the focused coding. The pool of tentative categories was evaluated to form permanent categories; subsequently, the relationships among them were identified. (vi) Memoing: Memo writing acts as an intermediary connecting data collection and analysis, and it prompts one to analyze data and codes while writing. Successive memo writing increases idea abstraction that generates new insights and converts protrude codes to theoretical categories. Figure 1 is a pictorial of the main processes of the hybrid methodology.

Figure 1.

High-level overview of the data analysis process.

2.2 The data

Primary data were collected through interviews. All interviews were conducted online due to travel restrictions imposed globally by the COVID-19 pandemic. The approach to inquiry took the form of in-depth interviews (IDI) following the standards of purposive sampling [33]. The researchers focused on purposive sampling because of their perspective of knowledge and understanding of the retail industry in Sri Lanka. Purposive sampling technique allows to seek research participants with much-needed flexibility. This nonprobability sampling is often used in qualitative research, and it allows exploratory researchers to gather initial data quickly and lays the foundation for a more extensive study.

Interview participants have been selected to represent various segments of the retail industry in Sri Lanka, from supermarkets, apparel, stationery, fast moving consumer goods (FMCG), and electronics. They are all considered as prominent players in the retail sector in Sri Lanka. This wide selection of participants covers a broad range of perspectives on the progression of the digital transformation during the COVID-19 pandemic and the level of digital maturity accelerated by it. Table 2 shows the company profile of respondent [R1] through [R9]. The numbering of respondents follows the chronological order of conducting the interviews in the data collection stage.

Respondents	Market Share	Employee Count	Market	Duration	Word Count
FMCG
[R1]	60% of the FMCG	1900	Mass market	50 min	5029
[R7]	$0.312 bn market capitalization	2600	Mass market	20 min	1726
Electronics
[R10]	$0.001 bn market capitalization	13,000	Mass market	20 min	1629
[R3]	$0.039 bn market capitalization	3723	Mass market	30 min	2460
Supermarkets
[R5]	$0.253 bn market capitalization	8932	Mass market	35 min	2523
[R6]	$0.006 bn market capitalization	20,092	Mass market	45 min	4553
[R2]	N/A	42	Mass market	40 min	3232
Other
[R4]	$0.028 bn market capitalization	172	Middle upper-income	20 min	1870
[R8]	$0.016 bn market capitalization	93	Mass market	25 min	2565
[R9]	N/A	69	Mass market	25 min	2016

Table 2.

Company profiles.

Respondent [R1] is a manufacturer and distributor of food items, beauty products, personal care goods, pharmaceuticals, and baby products; the head of customer excellence was interviewed. The respondent [R7] was the head of logistics of a manufacturer and distributor of food items in the FMCG sector. The chief marketing officer of [R10] and the marketing manager of [R3] were interviewed for the electronics sector. In the supermarket sector, we interviewed the former head of marketing [R5], the head of e-commerce [R6], and the brand manager of [R2]. In branded apparel [R4], the supply chain manager was interviewed. The director of operations and supply chain was interviewed in Stationery [R8]. The respondent [R9] was a business intelligence analyst in e-commerce online retailing.

The results of the grounded theory approach uncovered three main themes: (1) value creation, (2) digital transformation, and (3) digital maturity. To compare the extracted themes from the grounded theory approach with the widely discussed themes of digital maturity in the literature, we followed a framework-based approach. For this purpose, we incorporated the following frameworks into our framework-based approach: (1) the widely adopted value chain framework by Porter [34] and (2) the digital maturity frameworks analyzed by Bumann and Peter [3]. The latest release of MAXQDA software in 2022 was used for analysis in the framework-based approach. The main keywords of the listed tasks or dimensions in Ref. [3] were inserted into the system to count their occurrences in the corpus to achieve a quantitative comparison.

3. Findings

3.1 Digital maturity in the retail industry in Sri Lanka during COVID-19 pandemic

3.1.1 Leadership and culture

Leadership plays a critical role in the digital transformation process because it drives the business by merging digital culture with digital competence to achieve goals. Management is the decision-maker to apply digital technology, infuse work culture, and cocreate with the ecosystem. The company’s innovative and visionary leadership investigates how technology might be used to improve the customer experience and internal processes. Even though the retail industry’s leadership is visionary and willing to put in the time and effort, “our management and directors have given time and effort to the digital [R3].” The understanding of the digital transformation process remains shaky for a variety of reasons, including a lack of long-term results, a lack of time discipline, difficulty in underestimating customers’ reactions, a lack of trust, a fear of change, and a lack of digital education. “Not knowing what to use for what, not understanding … do it for the sake of doing it [R8],” “They – the IT team – mix everything up [R2],” “not looking into long term, scared to take the challenge because digital is expensive [R6].”

COVID-19 pandemic has changed the view of business leaders and opened a new perception to enhance customer experience, which was not there before. The real inspiration for the digital transformation has been reshaped toward a customer-centric approach, and the idea of digital technology implementation was reengineered to find solutions for customer pain points, “understand how to give them a personalized experience because of the data that give the persona of who the customer is assumed to be versus who the consumer really is [R8].”

Digital culture motivates business leaders to look ahead and find new solutions for a better customer experience. The digital culture values collaboration through transparency over individual effort. With such a culture in place, decision-making turns into fact-based rather than experience-based and diffuses throughout the organization. “In the FMCG sector, we never had a data scientist, the decisions were taken based on the leaders’ experience and their gut feelings. But now, we have realized that with the new technology coming into play, we must make more fact-based decisions [R1].”

3.1.2 Innovation, digital environment, processes, operations, customers, and the people

Before the COVID-19 pandemic, companies had a vision toward digital transformation but were unaware of its scope, which has changed over the pandemic. “We were not serious about the digital transformation and what it can do [R6].” After the pandemic hit, they identified the gaps in previous implementations and invested more in digital services. “The process was initiated before the pandemic [R2], [R4], [R6], [R8], and [R10],” “I just wish we could have done it faster [R8].”

The traditional value chain has been shaken up by the digital era and has undergone a technological transformation to create value for customers in the retail industry. During process transformation, the value chain faced two main challenges: first, rapid changes in customer behavior, and second, changes in the internal processes (affecting employees and business partners), which were triggered by the limitations imposed by the COVID-19 pandemic. Both changes are strongly intertwined.

Digital initiatives were limited to some business functions, and implementation was not a success at the beginning. “During the first lockdown, our website crashed multiple times, then we realized that we have to invest in digital assets [R6],” “now, we have seen a more advanced picture [R4].” However, due to the limitations that arose during the COVID-19 pandemic, business collaborations became more challenging, yet significant. The business models changed into a customer-centric approach by creating more creative avenues to reach out and service customers. The perception of the businesses changed after the pandemic from cost reduction and disintermediation [6] for enhancing customer experience and offering personalized shopping experiences. The real inspiration for the digital transformation has been reshaped in a customer-centric manner, and the objective behind implementing digital technology has become to find solutions for customers’ pain points “Understand how to provide them a personalized experience because of the data that gives the persona of who the customer really is [R8].”

COVID-19 pandemic stressed businesses to develop innovative solutions to keep operating under the “new normal.” There were numerous changes in the value chain functions even before the pandemic due to the advantages associated with digitalization. According to respondents, the changes in the value creation had happened throughout the main functions and the sub-functions of the value chain framework [34]. Retailers have successfully integrated all functions of the value chain and the ecosystem into one platform. The inbound logistics has undergone tremendous changes to reach supply chain 4.0. Due to the environmental and technological disruptions, the operational model has changed from seeking cost-effectiveness to enhancing customer experience. With the introduction of social media and shared economy platforms as a new way of doing business, “We tied up with Uber Eats and The Pickme foods to achieve the last-mile delivery to the customer, which was a success [R2].” Besides focusing on e-commerce, companies have also improved their internal operational processes by applying digital tools that led to escalated customer experience during outlet visits. “We did not want customers to come to us, we wanted to go to the customers … enhance the experience of our customer’s digitalization, we promised them within 4 hours we will be delivering products to their doorsteps, with the picking app, they can pay without going to the cashier [R2].” “The most important thing is the customer’s experience [R4].” By doing so, self-billing mobile apps were introduced in addition to e-commerce and door-to-door last-mile delivery. Sri Lankan companies have only focused on immediate cost-efficiency provided by digital finance. This had limited the use of digital finance to wiring transfers, payment approvals, and bookkeeping. “⋯ that is done via wire transfer from bank to the bank [R1–2], [R4], and [R7].” When companies begin to rely on data-driven insights, they will be able to successfully restructure their financial processes.

SAP applications, Oracle, online HR systems, and other web applications and software packages had become familiar to all interviewed companies, “SAP, zoom, teams, workday HR platforms [R1],” “we do work with Oracle… [R2–4] and [R6–7].” On the other hand, companies are still trying to figure out how to utilize historical data and data visualization for decision-making. “We are internally gearing to have information in our fingertips. Now, the problem is with these processes. Now, we are having so much of data, much of data lakes, but we don't know what to do with this data. Right now, the company is focusing on what sort of data mining techniques, what sort of data analytical tools can be used to extract this information. So, now, the Company is more focusing on recruiting data analysts and data scientists [R1].”

However, the digitalization on the customer side was not accompanied with a similar digital attention on the internal processes that added an extra burden to the workforce, “Operation department, it was a nightmare, people who are working in that department had to pick groceries, make the Billings, we needed more workforce to get the work done [R2].” For digital communication, Sri Lankan companies mostly rely on primitive digital solutions, such as emails, pdf files for contracts, and excel sheets. This still hinders the advancement toward the next horizon of the digital supply chain, “Now we have digitized through SAP, but the SAP version is at a very beginner level. It is not a fully pledged integrated SAP system yet. We are still relying on Excel [R1].”

Before the pandemic, “there were very few people who came into digital platforms, we got only 5% of sale from the e-commerce platform [R3],” “we were rejecting it. We were used to having to spend time in meeting rooms, none-of-us logging into MS teams, it was a hassle [R1].” Internally, it is a people issue, the COVID-19 pandemic caused additional pressure on employees initially “since we were forced to work from home, we did not have any other option, and I think we adapted ourselves quickly to digital platforms [R1].”

Managers stated that the hard part of digital transformation is to overcome employees’ reluctance, “I think the hard part in any digital transformation for employees is to first get through the initial barrier of clearing out internal processes. So, for the first bit of time, there was much doubt, and there was much negativity around the fact that it could take too long, and we're doing unnecessary things, and they – the IT team – didn't understand [R8].” The spectrum of HR requirements has been advanced from employee personal profile creation to location detection for attendance marks, “we can go to the website and apply for leaves, our profile is there, medical reports, salary slips [R2 – 3], [R7],” “attendance can be marked via phone through an app, we go to the app and then scan the location or take a picture [R2].” While some location-based HR monitoring practices may flare privacy concerns worldwide, they seem to be acceptable in Sri Lanka.

3.1.3 Digital marketing, technology, and customers

Sales and marketing became the highly digitally affected functions with the organizations. Companies showed a stronger tendency toward digital advertising for various reasons, cost-effectiveness, targeted marketing, home-centric routine due to the COVID-19 pandemic, heavy use of social media due to mandatory social distancing, “we cannot afford to go for traditional media, it is very expensive, digital marketing is efficient because we are talking to the right audience, we can target them based on their interest. Now people tend to do home workouts following YouTube or other sort of application [R3].” However, it is difficult to see corporations delving deeper into how marketing functions can be digitalized.

To achieve significant improvements in digital marketing, marketing leaders must embrace a wide range of digital platforms and a centralized platform for managing all digital marketing tools to achieve omni-marketing [35]. Some interviewed companies are still in the early stages of exploiting social media and e-commerce platforms, some stepped into digital for the first time due to the tensions induced by the COVID-19 pandemic, “we have moved our entire sales process into digital platform launched our website during the lockdown and shifted from place to space first time in the history of the company [R1].” Even though some retail companies followed a diversification approach in terms of visibility on social media, they have not yet embraced a central application that could simultaneously manage and automate communications over social media as done with Omni-channel marketing, “for each brand, we have our own social media accounts used other pages like retail chains to promote items we used distribution channels that are digitally strong, we launched our website during the lockdown which contains all our products, and through fan pages, in social media, we communicated our delivery services and all the other information and guidance required [R1].” The main goal of moving to social media was mainly for communicating with customers and clients to make sales, customer relationship management was not highlighted in most interviews, “we took all our marketing and promotional related activities to digital platforms, through these digital platforms; we were able to deliver our products to customers’ doorsteps during this period and during the lockdown, we listed and made available our products in other e-commerce sites and delivery sites, by namely Uber, pick me, kapruka.lk, etc.⋯ before this, we were kind of distant from our customers [R2].”

The digitalization of marketing involves more than just advertising on digital platforms, and creating interactive, responsive, and personalized digital campaigns also necessitates the development of the right technology to communicate with all stakeholders of the company [36]. “To communicate with our clients, it was through intermediaries; it took two, three stages to reach out ⋯ digital platforms give us a chance to get directly connected with our clients, good opportunity to get their direct response ⋯ we are developing a kind of platform where we can do direct marketing and sales [R2].” Such digital marketing implementation demanded investment in restructuring technology infrastructure in the company to align to digital marketing capabilities, “15 years ago, it was on paper, sales rep visit the outlet, take the sales order, write it on paper, bring it to the distribution point ⋯ now we have digitized through SAP⋯ all the network planning, supply planning, demand targeting is now happening through the SAP system, but the SAP version is at the very beginning level. It is not a fully pledged integrated SAP system. Still, we are relying on Excel [R1].”

With the digitalization of processes, the question that remains is whether the customer is ready to accept digital technology. Without customer engagement, the chance of success in digital initiatives becomes pervasive. Specifically, in the retail industry, customers become a barrier to value creation due to the expectation of touch and feel—customers demand the feel of the physical touch before making a purchase decision over the easy online ordering, “they don’t Feel the same quality, don’t feel the same satisfaction when they go to the physical store and buy it. For example, they want to buy some garments; they need to touch it, try it, and see. They are not confident in ordering online [R7].” “Customers need the visual part to convert their intention to a purchase [R9].” The understanding of the quality of shopping in Sri Lanka is that customers consider shopping as a form of relaxation away from their busy lives where they get time to spend with family and interact with other customers, “people think going to the supermarket is like a picnic ⋯ You meet people there, you feel good [R5],” “You can have a chat with the customer, and salesman, and it's an interaction [R4].” This is still ahead to achieve in digital.

The lack of digital literacy, at the present date, is also another important factor affecting customers’ acceptance. In general, the majority of purchasing power is held by generation X whom to be seen as not tech-savvy compared to millennials and generation Z, “in Sri Lanka, purchasing age category is generation X [R5].” “There is a very small segment who are very tech-savvy and open to buying things online, even to share their credit card details online [R3],” “they do not want to login to websites [R6].”

3.2 Comparative analysis of digital maturity findings and focus of academic research

We followed a hybrid approach for data analysis, which combined grounded theory and a framework-based approach to extract main themes from the corpus of the managers’ in-depth interviews and conduct comparative analysis. The three main themes extracted by employing the grounded theory approach were as follows: (1) value creation, (2) digital transformation, and (3) digital maturity. In line with the main themes extracted, we employed the work of Bumann and Peter [3] that described the most common digital transformation and maturity models in the literature in the past 10 years—as reported earlier in Table 1—to conduct comparative analysis.

We conducted a comparative analysis to investigate the gap between the priorities of the most common digital transformation and maturity models proposed in the literature in the past 10 years, and the current priorities of retail managers upon the COVID-19 pandemic in Sri Lanka. We constructed Table 3, in a similar manner to Table 1, which was constructed by Bumann and Peter [3]. To conduct a comparative analysis, we counted the occurrence of the dimensions in the corpus of the in-depth interviews for each respondent (for the respondents’ profiles, see Table 2) as follows: counting dimensions that occurred in the context of a need or a priority, not a complaint or a comparison before and after the pandemic. As in Ref. [3], we made sure that we convert our word count into percentages by dividing the total word count over the aggregate word count in all interviews excluding the dross. This count is reported in Score A at the bottom of Table 3, while Score B in Table 3 was obtained from Table 1—sourced from Ref. [3].

	Strategy	Leadership	Investment	Organization	Culture	Technology	Customers	Process	Cloud and data	Monitoring	Digital marketing	Products	Operation	People	Governance	Digital environment	Value chain	Innovation	Tasks	Structure
[R1]	2	8	5	7	1	47	8	9	29	1	9	9	9	9			4	1
[R2]	8	14	6	8		43	20	12	8		14	24	7	7				2		1
[R3]		1	3	8		35	5	4	3		13	11		2		1	1	2
[R4]	2			6		36	13	17	6		15	4	2	3
[R5]		2	4	1		29	5		2		11	3					1
[R6]		6	5	11		41	3	25	18	1	12	17	9	5				1		3
[R7]						14	4	2	6	1		3		12		1		2
[R8]	1	4	1	14		22	17	14	18			3	2	6			4	1		3
[R9]	2	2	4	4		14	29	2	10		11	17	11	8		1
[R10]	12	1	1	16		22	9	11	1		11	7		6				8
Count	27	38	29	75	1	303	113	96	101	3	26	98	40	58	0	3	70	17	0	7
Score A	2%	4%	2%	7%	0.5%	29%	12%	8%	8%	0.5%	12%	11%	4%	6%	0%	1.5%	7%	1%	0%	0.5%
Score B	12%	8%	2%	5%	15%	12%	7%	2%	2%	3%	2%	3%	6%	6%	5%	2%	2%	2%	2%	2%
Difference	−10%	−4%	0%	2%	−15%	17%	5%	6%	6%	−3%	10%	8%	−2%	0%	−5%	−1%	5%	−1%	−1%	−2%

Table 3.

Comparative analysis of dimensions count.

Score A—percentage of dimensions expressed in the interviews.

Score B—percentage of dimensions expressed in Table 1 by Bumannand Peter [3].

Mathematically, we describe the gap between the focus of digital transformation and maturity models surveyed by Bumann and Peter [3] and the top management’s needs during the COVID-19 pandemic as follows: the difference in the percentage of the expression of the dimensions of digital transformation and maturity models in Ref. [3] from the percentage of the expression of these dimensions in the managers’ interviews summarized in Score A in Table 3.

The findings of comparative analysis suggest that academic models of digital transformation and maturity prioritized the following dimensions: strategy, leadership, culture, operations, governance, innovation, tasks, and structure. The findings of in-depth interviews show that retail managers prioritize the following dimensions: technology, customers, processes, cloud and data, digital marketing, products, organization, and value chain. Retail managers and models of transformation and maturity paid equal attention to the following dimensions: investment, monitoring and control, and the people. Figure 2 is a visual representation of our comparative analysis. Our findings call for academic research to dedicate more attention to the following dimensions in the transformation and digital maturity models: technology, digital marketing, customers, cloud and data, products, processes, and value chain.

Figure 2.

Visual representation of comparative analysis.

4. Conclusion

The digital era is associated with the internet of things, robotic process automation, blockchain technologies, and advanced data analytics for real-time demand planning and sales and operations. In the context of the retail sector in Sri Lanka, the COVID-19 pandemic has brought about acceleration in digitization and digital transformation in the value chain processes. Before the COVID-19 pandemic, such digitization was limited to the implementation of enterprise resource planning solutions; however, due to the pressures of COVID-19, the retail industry in Sri Lanka has been experiencing digital transformation throughout the different processes of the value chain and witnessing an early stage of implementing data analytics for decision making and prediction.

Digital finance or Fintech, which is well-known to offer cost-efficiency by streamlining process automation and provide value-added contributions to the company, has not been well-implemented yet. Optimal implementation of Fintech technologies requires a holistic integration with all transactional and operational systems in place. The implementation of Fintech in the retail industry in Sri Lanka is limited to wiring transactions and online payment systems and mobile applications. Moreover, there are no plans yet to accelerate an innovative implementation of Fintech systems and services through blockchain integration. In the digital transformation process, managers had to face two types of challenges: first, emerge the digital technology with the organization strategies, and second, maneuver with changing: customer behavior, diminishing profit margins, and regulatory processes [3].

All interviewees pointed to the role of COVID-19 pandemic in the acceleration of digital transformation, which altered the business value chain in different ways related to logistics and supply chain, customer, employees, and business partners. Retail companies accelerated digital transformation during COVID-19 pandemic by applying various technologies to their organizational functions. The retail sector in Sri Lanka is still undergoing digital transformation. Many firms are pursuing digital transformation as a strategic goal to modernize their operations and remain competitive. Managers acknowledged the need for action toward a more accelerated digital transformation and the urgency of doing so, but they have limited resources to figure out what the best course of action should be. They seem to be struggling to adapt to the new digital environment.

Customers and suppliers are still struggling to cope with new changes due to the lack of digital literacy of generation X. Several other concerns, such as changing customer behavior, strict regulatory requirements, and diminishing profitability during the pandemic, add to the complexity of digital transformation. In addition, incumbents are battling the rising disruptive technical actors, such as Fintech startups, environmental disturbances as in COVID-19 outbreak, and the bargaining power of established large technology firms.

To answer the research question pertaining the identification of a discrepancy between the focus of digital transformation and maturity models in the literature within the past 10 years and the priorities of retail managers in top retail companies in Sri Lanka as follows: We compute the difference in the percentage of the expression of the dimensions of digital transformation and maturity models in [3] and the percentage of the expression of these dimensions in the managers’ interviews. The findings suggest that a gap exists between the dimensions that academic digital transformation and maturity models had focused on the needs of managers experiencing an accelerated digital transformation after COVID-19 pandemic. The digital transformation and maturity models paid equal attention to managers’ need for the following dimensions: investment, monitoring and control, and the people. It seems that the acceleration of digital transformation during the COVID-19 pandemic had called for academic research to exert more efforts in supporting managers to service customers and advance their purchase experience by focusing on the following dimensions: implementation of processes, the deployment of cloud and data, and the utilization of digital marketing for selling products. Technology, digital marketing, products, cloud and data, customers, value chain, and organization were expressed more in the interviews by the following differences 17%, 10%, 8%, 6%, 5%, 5%, and 2%, respectively. These factors are extremely important if businesses plan to embrace an accelerated digital transformation aiming at customer experience enhancement. Our findings call for the attention of academic researchers to consider and further integrate the following dimensions into their studies: technology, digital marketing and products-related dimensions, customers, cloud and data, value chain, and organization.

Conflict of interest

The authors declare no competing interests in conducting this research.